‘It’s about right-housing’ – Lloyds and Amex on what in-housing media means to them

Lloyds and Amex are taking a different, more data-focused approach to in-housing

Media in-housing and where it leaves agencies has permeated industry headlines over the past year, with brands like Vodafone and the Wall Street Journal finding success in running their own trading desks.

However, Lloyds and Amex are taking a more data-focused approach, adding new buzzword to the ad land lexicon in the process: “right-housing”, a term they believe encapsulates how they’re navigating the in-housing trend from within their walls.

A recent study from Infectious Media found that 59% of global chief marketing officers plan to bring more media functions in-house in 2020. Of this group, 27% are intent on carrying on their own programmatic buying, while a further 17% are set to in-house media buying.

American Express, however, won’t be among those investing in the latter.

Phil Wilson, senior vice-president of enterprise digital demand generation for the finance giant, revealed that as early as 2014 the brand briefly experimented with doing so and the results were underwhelming.

“When we tried to trade ourselves and did spend some money the ROIs were horrendous,” he said during an event hosted by Infectious. “So we’ve realised we do need [an expert agency] to do that.”

In the years since, however, the brand has invested in its adtech, analytics and data capabilities to power its performance marketing instead.

This has included in-housing its paid search business in international markets outside the US, supported by teams in New York, India, Singapore and London.

“That’s where our sweet spot is. It isn’t in trading, it isn’t in buying media. Now, for us in-housing and getting all those elements right is an international business and we’re setting up that infrastructure so that we can scale it,” Wilson added.

On the buying side, American Express works with Interpublic’s UM which was appointed to handle its global media business last year. The agency is tasked with helping the brand grow beyond its US roots and to drive greater marketing efficiency.

Another factor driving investment in internal digital talent for American Express is the need to keep up with regulatory changes like GDPR and the death of the cookie.

Wilson continued: “Recent changes to privacy and regulatory changes, like the shifting focus from cookie-based marketing to ID-based marketing has changed our perspective,” saying the latter needed to be controlled internally to ensure compliance.

“In-house for us is data, analytics and to an extent adtech. As we look at these three areas and we look at how our skillset and talent be utilised to build and scale our marketing, it’s a total game changer.”

‘Better conversations’ with agencies

It’s a similar story for Lloyds. Though the bank has never attempted to in-house buying like Amex it’s also been investing in bulking up its internal data, tech and measurement assets to put itself on an equal footing with agency partners.

“Our focus is not on bringing operational trade inside, it’s on building out our internal expertise on measurement and tech,” explained Nic Travis, head of digital marketing acceleration for the business, coining the term “right-housing” as a way to describe the nature of the undertaking.

Travis wouldn’t describe what Lloyds is doing as part of any big “in-housing journey,” and insisted it doesn’t want to put agencies on the backburner, it just wants to have the internal know-how to be more strategic about how it plans and buys media.

“If you want a better media agency, you need to become a better marketing organisation,” he said. “It’s not about in-housing everything, it’s about having talent that is able to have the right expertise and the right conversations with media agencies.”

For its part, Lloyds’ own digital talent pools – which are baked into its existing audience and data divisions – spend “two to three days a week” in the offices of MediaCom, which handles its £80m spend to make sure the teams are fully integrated.

“There’s a lot of focus on measurement and incrementally, and that is something we’re very much in the driving seat in these days… it makes more sense of these things to sit with us rather than a media agency,” he continued.

“We still absolutely believe you need an agency to help you manage the complexity of the constantly changing ecosystem and regulatory environment. Also to help scale up resource and investments as when we need to.”

Defining what in-housing means

Like American Express and Lloyds, an increasing number of advertisers are experimenting with some kind of in-housing model. Nearly one-in-five (19%) chief marketing officers highlighting a need for greater internal talent investment at the start of 2019.

For Bobbi Carley, head of media at the Incorporated Society of British Advertisers (Isba), though the term has been the buzz of the industry this year, brands still haven’t agreed on a single definition of what it means and they likely won’t

“We started an in-housing group at Isba, because we had so many brands asking questions,” she explained.

“We’ve had a few sessions and what come out of them is that people’s definitions are all so different. It’s moving fast and there’s still a lot of questions from marketers.”

She said “data-centric brands”, such a Lloyds and Amex, were owning the space, and in her experience, it was a “mixed bag” on whether the push to internalise media was coming from marketing leaders or procurement.

For Wilson, although the terminology is “unhelpful”, in-housing isn’t going anywhere soon.

“I don’t think it’s overhyped, businesses need to take more ownership [of digital]. The most effective marketing organisations will become more dependent on their internal knowledge, and the agency will become a partner that can facilitate and amplify.”

Traditional agencies too are adapting their business models to accomodate brands that want to in-house elements of their marketing and media. Infectious Media recently launched its own in-house consultancy, following in the footsteps of VaynerMedia which launched a similar proposition earlier in 2019.

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